Would you buy now?

garbaldisham

Davesnave wrote: »

.. However, if prices now stagnate, or fall for a long time due to a period of weak economic growth, that could change, and some folks may be in trouble if they have large mortgages they can't sustain.

Again, it's an "if" - as are a lot of the things any of us (yeah, me included) have said. Problem being that nobody knows what's going to happen in the next five years, let alone the next two or three decades. For all my bickering my own opinions are based solely on the experience of myself and people I know - ie people who live in the same part of the country as me, in a similar income bracket, family structure, etc. Someone who lives a hundred miles away without kids is in an entirely different world as far as home buying / renting is concerned - so the variables are so numerous and so great as to make generalised conclusions in either direction at least very shaky.

Like you, I dislike renting and I need an owned home to run a specialist business, so it's a 'no brainer' for me too. However, as the next 20 years seem very unlikely to resemble the last two decades, there may be little relevance in the rear-view mirror approach we are all adopting here.

..and when is the reset said:

I just don't agree with people stating categorically that buying is the best way - it isn't for many people.

Very true. End of the day you have to look at what's right for you in the here and now - however, to return to the OP, given the wherewithal, and if was to be a long-term home, if it were me I'd buy now. It'll very probably be worth what you paid for it again one day, and in the end it'll be yours.

When_is_the_reset?

At least some some people now get the fact that it can be cheaper to rent. Reinvest the savings and have more money in ready cash than a house is worth at the end of the 25 year period.

People keep saying buying a house is a no-brainer but they are not using their own brain. This is not a monthly comparison of mortgage payments versus rent payments - this is a life-long comparison of cost of ownership versus renting and reinvesting the savings.

One last time - you can have more money in the bank after renting than a house is worth after finishing paying the mortgage.

So buying is not a no-brainer. You must just have no brain to not consider the whole picture when making one of the most important decisions of your life.

cashbackproblems

Davesnave wrote: »

The argument is that renting is usually cheaper than a mortgage, especially when home improvement/maintenance is accounted for, so a renter can put the difference into investments and build up 'equity' in those.

Against that, is the fact that, historically, house prices have risen, so mortgagees recoup what they 'lose' in interest payments and maintenance/upgrading, usually with a good margin on top. However, if prices now stagnate, or fall for a long time due to a period of weak economic growth, that could change, and some folks may be in trouble if they have large mortgages they can't sustain.

The other poster provided an example of a time where a renter might have been better off than a home buyer, but the period had to be chosen carefully to 'prove' this and a few other assumptions needed to be made. One is that renters would actually invest the difference, and not just consume it.

Like you, I dislike renting and I need an owned home to run a specialist business, so it's a 'no brainer' for me too. However, as the next 20 years seem very unlikely to resemble the last two decades, there may be little relevance in the rear-view mirror approach we are all adopting here.

If you buy a home in good condition how many essential home improvements are you actually going to need to undertake, while you still continue paying bills/council tax even when renting.

The next 20 yrs prices will continue to increase in most areas but just not by as much as 5-10% every year. Demand still outstrips supply. UNless youv paid well above value of a house your not going to lose much long term.

However i can understand while your trying new areas or needing short term stay renting is fine.

cashbackproblems

When_is_the_reset? wrote: »

At least some some people now get the fact that it can be cheaper to rent. Reinvest the savings and have more money in ready cash than a house is worth at the end of the 25 year period.

People keep saying buying a house is a no-brainer but they are not using their own brain. This is not a monthly comparison of mortgage payments versus rent payments - this is a life-long comparison of cost of ownership versus renting and reinvesting the savings.

One last time - you can have more money in the bank after renting than a house is worth after finishing paying the mortgage.

So buying is not a no-brainer. You must just have no brain to not consider the whole picture when making one of the most important decisions of your life.

:wall:

Sure you might have money in the bank, but someone whos paid off their mortgage has the equity in their property and no longer have to pay rent/mortgage payments, unlike you who will continue doing so for the rest of your life (if your in tht position). Plus your house will be worth much more than you paid over a 20-30yr period.

spudnik

We are in the same boat as you, and we are worried about house value.

The 2 parts you need to think about are

Value for money
compare the money you are loosing due to inflation on your savings coupled with the amount you would loose due to hpc (we are considering a maximum 30% drop from now) the fees involved in buying any new mortgage arrangement fees over 10 years, and putting aside a certain amount each year to cover repairs.

Compare this to your rent over 10 years (include a 2.5% rental increase each year) a new stupid fee each year (assuming you'll move each year)

That should give you the head calculation. I have ignored any savings.

The second part is quality of life

people like to nest, and you shouldn't let that over ride you, you should consider bad neighbours are harder to move from if you buy, but you can arrange the house as you like.
If you need to move for work quickly, selling a house takes considerable time whereas renting is a months notice.

In the end we decided that in the head calculation buying works out better for us JUST over 10 years, If we get a house we won't be shifted from ie/ priced right(for now using nationwide calculator, based on previous sales), schools, size.

Unfortunately most houses for sale near us are dumps usually with weird layouts, and we have spotted a long term rental in a greenbelt area that we could never afford to buy but we can comfortably afford to rent, so we have decided to wait till the new year and see if that brings any change.

tawse57

I think it is simple - in my area IMPO asking prices are at least 20% over-valued so they have to come down by that amount to make economic sense.

Sellers expect to get full asking price so the gap between asking price and reality is just too great.

joerugby

If you can afford it and you are going to live in the house for the next 15 years or so then buying might well be best. It may cost you more but you will have total security of tenure and the ability to do what you like with the property as your needs change. If you value those benefits then go for it.

Just don't expect to realise a capital gain - there is no reason at all for prices to rise in the future, indeed they still have some way to fall before they reach an affordable level in relation to earnings. So don't buy in the hope of making a profit.

milliebear00001

I am buying now, but my situation means I have been desperate to for some time! I sold my last house in 2005 with a view to buying with a tiny mortgage near my home town. Events meant this didn't happen and 5 years and two children down the line, we are still renting.

We have been lucy enough to find a long-term tenancy with a professional LL. Our house is unfurnished and neutrally decoarted, so we have been able to 'make it our own'. I can honestly say though, that it is not nice renting with small children. It feels insecure and I am looking forward to buying.

In my town, decent sized houses, with gardens, are at a premium - especially in my (very tight) budget. Unlike many of you, there jut aren't 'loads' of houses to choose between. The house we are buying is the only one we have found that ticks all our boxes, and is in price-range.

I could continue to rent, but my abiding fear is that we will 'miss the boat'. We saw prices spiral out of our reach after 2005 and have not had enough income to buy for the last five years. I daren't wait any longer for fear that prices may again rise out of reach - possibly forever this time!

What do renters do when they retire and have a smaller income, but the same rent to pay? A big concern for me, is that I have a 'paid for' home, by the time I retire.

When_is_the_reset?

cashbackproblems wrote: »

:wall:

Sure you might have money in the bank, but someone whos paid off their mortgage has the equity in their property and no longer have to pay rent/mortgage payments, unlike you who will continue doing so for the rest of your life (if your in tht position). Plus your house will be worth much more than you paid over a 20-30yr period.

You can post as many 'banging your head against the wall' smileys as you like but you still don't get it.

The words in your post show that you don't understand. I am not going to explain again so you will just have to try to think about it yourself.

If you can be bothered - read the moneyweek article linked above and then really think about it, no, really think about it.

Most people have been brainwashed by the media and VIs in this country - time to start thinking for yourself?

cashbackproblems

When_is_the_reset? wrote: »

You can post as many 'banging your head against the wall' smileys as you like but you still don't get it.

The words in your post show that you don't understand. I am not going to explain again so you will just have to try to think about it yourself.

If you can be bothered - read the moneyweek article linked above and then really think about it, no, really think about it.

Most people have been brainwashed by the media and VIs in this country - time to start thinking for yourself?

IM afraid the odd article isnt going to change my mind as i have worked in the property rental business and the basic sums means that over time you will be better off buying and paying a mortgage rather than someone elses, as my above example illustrated. You still havent mentioned how you will be better off with the fact tht aged 50-60 most ppl will be living rent free and u'l be paying for the rest of ur life with nothing to show for it/pass onto your kids.

Its thanks to ppl like you that my parents make money from their rental properties. :beer: